Intellasia East Asia News – Coronavirus: tougher penalties for HK employers who fail to hire enough workers under new wage subsidy scheme

Hong Kong employers who fail to hire enough workers but apply for wage subsidies under a coronavirus relief scheme will face tougher penalties, the city’s labour minister has warned ahead of the opening of the registration window on Friday.

Further details of the new round of the Employment Support Scheme were revealed at a press briefing on Monday, with Secretary for Labour and Welfare Law Chi-kwong saying the latest unemployment figures for February to April were expected to be higher than ones in previous months.

However, Law also said the unemployment rate was likely to drop between the March to May period as the city continued to ease social-distancing curbs and residents spent their consumption vouchers.

“We should have passed the peak of unemployment already. As long as the epidemic situation is under control, together with the launch of different measures, hopefully the employment situation will improve,” he said.

About two weeks ago, the Legislative Council’s Finance Committee approved a total funding of HK$43 billion (US$5.47 billion) to support the scheme.

Law said applications for the programme would open this Friday and last for two weeks until May 12. The first batch of the subsidies is expected to be provided in early May.

Doris Ho Pui-ling, head of the government’s Policy Innovation and Coordination Office, said employers applying for the funds would need to use them for wages.

Employers who failed to employ the number of staff they pledged to hire between May and July, the months covered in the scheme, would face tougher penalties, she warned.

“In any of those months, if the amount of employed staff is lower than the chosen subsidised headcount, employers will need to return the amount for each missing employee, plus a 10 per cent penalty fee,” Ho said.

For example, if an employer promised to hire 10 full-time staff, but only hired nine, the company or individual would need to return a HK$8,000 subsidy fee together with a HK$800 penalty to the government.

The latest scheme will offer employers up to HK$8,000 a month per eligible worker for three months less than the maximum of HK$9,000 monthly for half a year under the previous round.

Under the latest arrangement, the number of workers covered by the scheme has increased to 1.74 million from the initial 1.3 million.

A salary cap on eligible workers was also removed, and coverage limited to a maximum of 1,000 employees per company to better target small and medium-sized enterprises.

Hong Kong’s jobless rate rose to 5 per cent in the three months ending in March, the highest in nine months. The mark was up 0.5 percentage points in the rolling period from January to March, compared with 4.5 per cent in the period from December to February.


Category: Hong Kong

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